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Price is everything

  • #29,581
  • Feb 4, 2015 12:32pm Feb 4, 2015 12:32pm
Quoting Rufus
{quote} THATS what buys the cigars and scotch....AMEN

A collective AMEN
I need to finish something i started
  • #29,582
  • Feb 4, 2015 12:40pm Feb 4, 2015 12:40pm
Quoting Rufus
{quote} I'm with you on that one. I am gunning for 2:1 or more. But if the big money is being stingy I will take 1;1 OR LESS. Always acting in my own best interest. Red will often take 2/3 off at 1:1 Let rest run. But as was said earlier, we eachg find our own path to trade S/D. . Red and I were even talking about how the big money guys are adapting their trading style to hinder the over abundance of s/d traders. We need to adjust as well. Rufus
Now if i am mistaken Red is not around to ask. Do you mean IF?
I need to finish something i started
  • #29,583
  • Feb 5, 2015 7:59am Feb 5, 2015 7:59am
"Knowing when to touch trade and why".

Think about this very deeply!

The market movers can not hide their intentions.

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I need to finish something i started
  • #29,584
  • Edited 10:10am Feb 5, 2015 9:59am | Edited 10:10am
Quoting bigwal
"Knowing when to touch trade and why". Think about this very deeply! The market movers can not hide their intentions. {image}
Hi Warren,
hasn't someone who trades the RTM way look out for a short? I'm not that familar with this subject bit isn't it a bearish QM and the spike at B an engulf of a DP?

For me it was a nice fake out at (mark B) at a rich historical level. Textbook long. Unfortunately I'm not trading this week due to babysitting tasks

Congratz if you were/are long.
  • #29,585
  • Feb 5, 2015 10:42am Feb 5, 2015 10:42am
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  • #29,586
  • Feb 6, 2015 3:32am Feb 6, 2015 3:32am
LONG EURJPY
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  • #29,587
  • Feb 6, 2015 9:05am Feb 6, 2015 9:05am
longg EJ what do you think?
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  • #29,588
  • Feb 6, 2015 10:39am Feb 6, 2015 10:39am
Quoting Kuguar
longg EJ what do you think? {image}
Nice trade! Looks like a triple top now though.
  • #29,589
  • Feb 7, 2015 6:03am Feb 7, 2015 6:03am
Quoting redsword11
l believe that fundementals are a vehicle used by the market makers to move prices to key supply and demand levels where they have placed limits ahead of time to be filled sell the rumour buy the news, buy the rumour sell the news etc - leaks and all the rest of the stuff its all reflected in patterns regardless ....... in the price .......... in the bars l follow enguilfing patterns, why? Only instutions have enough money, volume, funds to create those patterns, enguilfing represents the otherside of trapped retail, if you get my meaning So, it...

This still holds true to today.
I need to finish something i started
  • #29,590
  • Feb 7, 2015 8:28am Feb 7, 2015 8:28am
Quoting bigwal
{quote} This still holds true to today.
Not always. I only say end of EUR SNB intervention and some other desasters
  • #29,591
  • Feb 7, 2015 9:15am Feb 7, 2015 9:15am
MCFly,

I was not trading at that time, even if i was more than likely not that pair.

Not at home so can not post a chart.

But are you saying there was no engulf before the drop?
I need to finish something i started
  • #29,592
  • Feb 7, 2015 10:24am Feb 7, 2015 10:24am
Quoting bigwal
MCFly, I was not trading at that time, even if i was more than likely not that pair. Not at home so can not post a chart. But are you saying there was no engulf before the drop?
Hi Warren,
maybe my eyes are not the best but I have problems to see any pattern ^^.

Honestly maybe there was something before that told you to go short but the rule that ptice is driven to the next zone of interest wasn't working. It was a stop loss cascade the nightmare of all traders (who were at the wrong side) and market makers. The mechanism of the marked didn't worked at that time. It was a bloody slaughterhouse.
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  • #29,593
  • Feb 7, 2015 11:06am Feb 7, 2015 11:06am
Quoting MCFly
{quote} Hi Warren, maybe my eyes are not the best but I have problems to see any pattern ^^. Honestly maybe there was something before that told you to go short but the rule that ptice is driven to the next zone of interest wasn't working. It was a stop loss cascade the nightmare of all traders (who were at the wrong side) and market makers. The mechanism of the marked didn't worked at that time. It was a bloody slaughterhouse. {image}
Supply and demand can be identified on price charts. New s/d traders learn to find s/d zones early in their s/d education. However, these zones are only one piece of the puzzle. A zone may be respected or violated. Why either one of these actions happens is determined by a bit more complex factors. One major concept is that of ENGULFS. I don't mean engulfing candles but rather engulfs of prior zones. Confusion can arise as engulfs occur on different time frames.

Very simplistically if a supply zone is engulfed north then price is saying I intend to go further north (as long as their is not another supply zone lurking just above). To go further north more buyers may be found south so price retraces south to pick up more buyers. The next supply zone above would be the next target.

Zones are easy to find. Trading them is more difficult and I think this is where new s/d traders get frustrated.
  • #29,594
  • Feb 7, 2015 11:42am Feb 7, 2015 11:42am
Quoting Winston Reed
{quote} Supply and demand can be identified on price charts. New s/d traders learn to find s/d zones early in their s/d education. However, these zones are only one piece of the puzzle. A zone may be respected or violated. Why either one of these actions happens is determined by a bit more complex factors. One major concept is that of ENGULFS. I don't mean engulfing candles but rather engulfs of prior zones. Confusion can arise as engulfs occur on different time frames. Very simplistically if a supply zone is engulfed north then price is saying...
I think you misunderstood my post. I have no problems in finding patterns...I was refering to this special situation where the SNB has announced to finish the EUR buys (do you see the funny candles before which look like a line now). It was a response to Warren's post where he quoted Red.

I trade S&D since a looooooooong time. S&D and PA is the best in the world. So it's not needed to give me some basic lessons.
  • #29,595
  • Feb 7, 2015 11:57am Feb 7, 2015 11:57am
Quoting MCFly
{quote} Hi Warren, maybe my eyes are not the best but I have problems to see any pattern ^^. Honestly maybe there was something before that told you to go short but the rule that ptice is driven to the next zone of interest wasn't working. It was a stop loss cascade the nightmare of all traders (who were at the wrong side) and market makers. The mechanism of the marked didn't worked at that time. It was a bloody slaughterhouse. {image}

MCFly,

Yes from my feeds aswell , it is flatline compared to the drop. News can give a engulf then fake out, but this was special circumstances, i have never seen anything quite like this.

How long you been trading MCFly?
I need to finish something i started
  • #29,596
  • Feb 7, 2015 1:02pm Feb 7, 2015 1:02pm
Quoting MCFly
{quote} I think you misunderstood my post. I have no problems in finding patterns...I was refering to this special situation where the SNB has announced to finish the EUR buys (do you see the funny candles before which look like a line now). It was a response to Warren's post where he quoted Red. I trade S&D since a looooooooong time. S&D and PA is the best in the world. So it's not needed to give me some basic lessons.
There's an old story out there somewhere...maybe it was from Reminisces of a Stock Operator, I'm not sure...but I'd like to retell its essence (albeit crudely).

An upbeat young trader is trying to gain employment as an institutional trader, and goes in to see the boss. He boasts that he can tell where the market is going to go every time. The boss tells him, "Is that so? Then tell me, where are soybeans going?" The young trader makes his prediction that soybeans will soon rally. So the boss picks up the phone and makes a call to the exchange, and barks the orders to sell some large quantity of soybean contracts. He looks at the young trader, who is by this point dumbfounded. The moral of the story is, that you won't always be right about the market. While I'm sure strong users of these techniques have a very high success rate with practice, they don't always get it right. Sometimes, insider deals like this happen and you just can't predict that. You have to protect yourself for the unknown.

By the way, if someone knows the origin of that story, please let me know, I've tried finding it but hate to resort to skimming the novel again if indeed it is in that particular title.
  • #29,597
  • Feb 7, 2015 1:06pm Feb 7, 2015 1:06pm
Hi guys,

I have a question that has been doing my head in a bit.
It's about how SD zones work on pairs in which the decisions were not directly made.

For example, imagine we're looking to trade the NZDCAD pair because we see a large drop indicating supply (bottom 2 images).
Our expectation is that price should react approximately at that price point.
However, the drop on NZDCAD was actually simply a reflection of large institutional selling on NZDUSD (top image).
The second image shows USDCAD as a very basic straight line.

Assume in this simple example that there is no direct trading between NZD and CAD, and that these are the only 3 currencies in the market.
NZDCAD is the movement of NZDUSD with USDCAD's movement applied to it.
Therefore when price does finally react, it does so at the price that NZD was deemed good value for shorting relative to the USD.
At this point in time, NZDCAD has drifted upwards and so price would react higher up beyond the zone.

How does SD analysis work on the pairs in which there is little direct flows?
Should we always be looking at the related pairs to see which is the one with the true SD?

As I said, I hadn't thought too much about it before, but did so recently, and it started driving me crazy, ha ha

Thanks,

Andy

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  • #29,598
  • Feb 7, 2015 4:55pm Feb 7, 2015 4:55pm
Quoting Kanzler
{quote} There's an old story out there somewhere...maybe it was from Reminisces of a Stock Operator, I'm not sure...but I'd like to retell its essence (albeit crudely). An upbeat young trader is trying to gain employment as an institutional trader, and goes in to see the boss. He boasts that he can tell where the market is going to go every time. The boss tells him, "Is that so? Then tell me, where are soybeans going?" The young trader makes his prediction that soybeans will soon rally. So the boss picks up the phone and makes a call to the exchange,...
-----------


Trading in the Zone
----------------------


The semiretired chairman of the board of the brokerage firm was a longtime trader with nearly 40 years
of experience in the grain pits at the Chicago Board of Trade. He didn't know much about technical
analysis, because he never needed it to make money on the floor. But he no longer traded on the floor
and found the transition to trading from a screen difficult and somewhat mysterious. So he asked the
firm's newly acquired star technical analyst to sit with him during the trading day and teach him
technical trading. The new hire jumped at the opportunity to show off his abilities to such an
experienced and successful trader. The analyst was using a method called "point and line," developed
by Charlie Drummond. (Among other things, point and line can accurately define support and
resistance.) One day, as the two of them were watching the soybean market together, the analyst had
projected major support and resistance points and the market happened to be trading between these two
points.
As the technical analyst was explaining to the chairman the significance of these two points, he stated
in very emphatic, almost absolute terms that if the market goes up to resistance, it will stop and reverse;
and if the market goes down to support, it will also stop and reverse. Then he explained that if the
market went down to the price level he calculated as support, his calculations indicated that would also
be the low of the day. As they sat there, the bean market was slowly trending down to the price the
analyst said would be the support, or low, of the day. When it finally got there, the chairman looked
over to the analyst and said, "This is where the market is supposed to stop and go higher, right?"
The analyst responded, "Absolutely! This is the low of the day." "That's bullshit!" the chairman
retorted. "Watch this." He picked up the phone, called one of the clerks handling orders for the soybean
pit, and said, "Sell two million beans (bushels) at the market." Within thirty seconds after he placed the
order, the soybean market dropped ten cents a bushel. The chairman turned to look at the horrified
expression on the analysts face. Calmly, he asked, "Now, where did you say the market was going to
stop? If I can do that, anyone can."
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #29,599
  • Feb 7, 2015 5:56pm Feb 7, 2015 5:56pm
Ah thank you Rufus, wrong title entirely. Good story though and puts some perspective on risks in trading.
  • #29,600
  • Feb 7, 2015 6:09pm Feb 7, 2015 6:09pm
this story actually conveys wrong idea sometimes

someone might get the idea, oh ok, the market may not be predicted, or even it is random

in fact, the only conclusion from the story is that junior analyst is naive in saying 'ABSOLUTELY' about his prediction. nothing else.

any major market may only reflect two things: the leading market mover's action, OR, the collective participants' intention.

and both of these two are representative of human intelligence, they are supposed to be considerably predictable.
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